Fitch Takes Various Actions on NSLT 2014-3

NEW YORK--(BUSINESS WIRE)--Fitch Ratings has taken the following rating actions on Navient Student
Loan Trust 2014-3 (NSLT 2014-3):

--Class A downgraded to 'AAsf' from 'AAAsf'; removed from Rating Watch
Negative and assigned Outlook Stable;

--Class B affirmed at 'AAsf'; Outlook Stable.

The class A notes fail Fitch's 'AAAsf' Up Maturity stress scenario due
to the interest shortfall after the reserve account steps down on August
2019 to 0.25% from 2.25%.

KEY RATING DRIVERS

U.S. Sovereign Risk: The trust collateral consists of 100% of Federal
Family Education Loan Program (FFELP) loans, approximately 15% of which
are rehabilitated loans. The credit quality of the trust collateral is
high, in Fitch's opinion, based on the guarantees provided by the
transaction's eligible guarantors and reinsurance provided by the U.S.
Department of Education (ED) for at least 97% of principal and accrued
interest. Fitch currently rates the U.S. 'AAA' with a Stable Outlook.

Collateral Performance: Fitch assumes a base case default rate of 23.00%
and a 60.25% default rate under the 'AAAsf' credit stress scenario. The
base case default assumption of 23.00% implies a constant default rate
of 3.6% (assuming a weighted average life of 19 years) consistent with
the trailing 12 month (TTM) average constant default rate utilized in
the maturity stresses. Fitch applies the standard default timing curve.
The claim reject rate is assumed to be 0.50% in the base case and 3% in
the 'AAAsf' case.

The trailing 12 month average of deferment, forbearance, Income-based
repayment (prior to adjustment) and constant prepayment rate (voluntary
and involuntary) are 7.44%, 14%, 11.5% and 8%, respectively, which are
used as the starting point in cash flow modeling. Subsequent declines or
increases are modeled as per criteria. The borrower benefit is assumed
to be approximately 0.17%, based on information provided by the sponsor.

Basis and Interest Rate Risk: Fitch applies its standard basis and
interest rate stresses to this transaction as per criteria.

Payment Structure: Credit Enhancement (CE) is provided by excess spread,
overcollateralization and for the class A note, subordination provided
by the class B note. As of the October 2016 distribution report, total
parity is 104.71% (4.50% CE) and senior parity is 108.24% (CE 7.61%).
Excess cash will continue to be released from the trust given a target
CE amount equal to the greatest of 4.50% of the adjusted pool balance
and $2.75 million has been maintained. Liquidity support is provided by
a reserve account currently sized at $4,947,661. The required reserve
account balance for any distribution dates prior to Aug. 25, 2019 (the
step-down date) is 2.25% of the current student loan balance; then on
and after the step-down date, the greater of 0.25% of the current
student loan balance or 0.10% of the initial student loan balance.

Maturity Risk: Fitch's student loan ABS cash flow model indicates that
the notes are paid in full on or prior to their respective legal final
maturities.

Operational Capabilities: Navient Solutions, Inc. (FKA Sallie Mae,
Inc.), ACS, and Great Lakes are the master servicer, subservicer and
subservicer, respectively, and are responsible for the day to day
servicing of the portfolio. Fitch believes all to be acceptable
servicers of FFELP student loans at this time.

CRITERIA VARIATIONS

Under the 'Counterparty Criteria for Structured Finance and Covered
Bonds', dated July 18, 2016, Fitch looks to its own ratings in analyzing
counterparty risk and assessing a counterparty's creditworthiness. The
definition of permitted investments for this deal allows for the
possibility of using investments not rated by Fitch, which represents a
criteria variation. Fitch does not believe such variation has a
measurable impact upon the ratings assigned.

RATING SENSITIVITIES

'AAAsf' rated tranches of most FFELP securitizations will likely move in
tandem with the U.S. sovereign rating, given the strong linkage to the
U.S. sovereign by nature of the reinsurance and SAP provided by ED.
Sovereign risks are not addressed in Fitch's sensitivity analysis.

Fitch conducted a CE sensitivity analysis by stressing both the related
lifetime default rate and basis spread assumptions. In addition, Fitch
conducted a maturity sensitivity analysis by running different
assumptions for the IBR usage and prepayment rate. The results below
should only be considered as one potential model implied outcome as the
transaction is exposed to multiple risk factors that are all dynamic
variables.

Credit Stress Rating Sensitivity

--Default increase 25%: class A 'AAAsf'; class B 'AAAsf'

--Default increase 50%: class A 'AAAsf'; class B 'AAsf'

--Basis Spread increase 0.25%: class A 'AAAsf'; class B 'AAAsf'

--Basis Spread increase 0.50%: class A 'AAAsf'; class B 'AAAsf'

Maturity Stress Rating Sensitivity

--CPR decrease 50%: class A 'Asf'; class B 'Asf'

--CPR increase 100%: class A 'AAAsf'; class B 'AAAsf'

--IBR Usage increase 100%: class A 'Asf'; class B 'Asf'

--IBR Usage decrease 50%: class A 'AAsf'; class B 'AAsf'

Stresses are intended to provide an indication of the rating sensitivity
of the notes to unexpected deterioration in trust performance. Rating
sensitivity should not be used as an indicator of future rating
performance.

USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10

Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in
relation to this rating action.

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